25 Nov 2016
Australian Federal Budget 2016: Superannuation Reform
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 was passed on the 23rd November 2016 with the majority of the changes to commence from 1 July 2017.
Key changes include:
- New $1.6 million transfer balance cap which limits the amount that can be transferred to the retirement pension phase where earnings are tax-free.
- Reducing the concessional (before tax) contributions cap to $25,000 for all taxpayers.
- Reducing the non-concessional contribution cap to $100,000 per financial year or $300,000 under the 3 year bring forward provision.
- Removing tax exempt earnings for transition to retirement income streams.
- Lowering the income threshold for Division 293 tax to $250,000.
Click for legislation.
This is very exciting news right now because it allows an individual (if under age 65) to make a $180,000 non-concessional contribution into superannuation or trigger the 3 year bring forward provision and contribute up to the maximum $540,000 into superannuation this financial year.
It is a use it or lose it situation and conditions do apply.
WARNING, these comments do not constitute Personal Advice.
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